Corporate / M&A

In a nutshell

M&A (1)

Corporate is often thought of as a 'one size fits all' practice area, including everything that isn’t exclusively litigation or tax. However, cream of the crop BigLaw firms typically focus their corporate work on M&A and corporate governance. Some firms also include capital markets and private equity, but those practices are so vast in their own right, we’ve decided to treat them to their own page.

A lot of corporate work sees lawyers counseling clients from cradle to grave: from their initial startup, through raising capital, going through mergers and acquisitions to helping companies with day-to-day issues once they become operational.

Public M&A is the name of the game for some firms, who advise either the buyer or seller in their transaction with a public company. A company is considered ‘public’ if anyone who has a share in the company is considered an equity owner. These transactions are usually the highest value and often involve cross-border jurisdictions

Private M&A, on the other hand, occurs between private companies. Private companies do not trade shares on the stock market and are subject to less rigorous regulation than public companies. As a result, these transactions tend to involve stock or cash considerations, too.

Corporate governance means lawyers advise companies on issues concerning the board of directors and their relationship with shareholders. A corporate governance lawyer is typically called in to handle shareholder disputes.

“I think what surprised me the most is how much I actually enjoy being a corporate lawyer. I had no background or experience in business, but quickly discovered that mergers and acquisitions was an interesting and challenging practice that I found fun – and still do.”


What lawyers do

Public M&A for buyer

  • Identify the client’s business objectives.
  • Identify the legal issues – these vary depending on factors like whether the deal is friendly or unfriendly.
  • Build a ‘road map’ for the client from start to finish, and include a timeframe.
  • Advise on deal and negotiating tactics.
  • Conduct due diligence on the other side.
  • Determine – with the help of tax attorneys – the tax implications and if they require special structuring.
  • Work with antitrust attorneys to assess regulatory obstacles, gain regulatory approval and analyze any other required regulatory approvals.
  • If cross-border, work with local counsel. Review all the client’s contracts: business, employment, outsourcing, debt instruments, preferred stock, etc.
  • Obtain third party consents from lenders or parties to other contracts.
  • Negotiate agreement, sign, announce publicly, close the deal.
  • Attorneys for the target decide whether to negotiate, refuse the buyer’s overtures, sell, or do a deal with another company. 

"If you’ve gotten the idea that it sounds good on paper, or is remunerative or prestigious, that won’t carry you through; you actually have to find it interesting.”


Realities of the job

  • “The most important thing for a corporate lawyer is to develop an understanding of what’s most important to your client – what they are really trying to accomplish and what issues really matter to them and why,” explains Victor Lewkow of Cleary Gottlieb Steen & Hamilton.
  • Robert Townsend of Cravath, Swaine & Moore LLP highlights some of the characteristics common of those working in corporate/M&A, which include being “driven and motivated to maintain a high level of quality. You need to be intellectually curious in order to identify issues, but also practical so that you can figure out how to best solve those issues – that's where we add value.”
  • An M&A transaction can have “a whole laundry list of tactics to choose from and issues to consider, depending upon what side you’re on,” says Alison Ressler of Sullivan & Cromwell, meaning that no two deals are exactly the same. Similarly, each deal will have a unique life cycle and so some will naturally take longer to complete than others.
  • A key part of M&A work is explaining issues in a way that makes sense to the client. “Lawyers often use enormous amounts of jargon, with great expertise and complexity, which is not necessarily helpful for the businesspeople involved,” Lewkow tells us. He adds: “Often there is no perfect answer, so some of the time you’ll be helping the client figure out what the least ‘bad’ alternative is.”
  • Townsend adds: “You need to have the ability to articulate your position in a way that is clear and concise so that a business person can understand. It is also important to listen carefully to what your client and the other side are saying in negotiations in order to know how to modify your strategy accordingly.”
  • Due diligence will largely fall to associates and, though it can be tedious, it’s crucial for attorneys to understand what’s in the documents. “Law students tend to think of us as just reading and marking up documents, but a key characteristic of a top corporate lawyer is the ability to negotiate and construct arguments on your feet,” states Ressler.
  • Delaware, where many corporations are incorporated, has among the most pronounced and expansive laws on the duties of the board and rules concerning special committees, which have tremendous implications for M&A transactions and corporate governance work. Lewkow confirms: “Many of the corporate law court decisions in Delaware influence how we address problems and generally go about structuring transactions.”
  • Public companies, particularly those in the Fortune 500, are slick operations with considerable legal budgets and expertise, and usually need less hand-holding than smaller, less sophisticated clients.
  • The high-pressure nature of the work is a result of “not only having the chance to be involved in issues that are very important to your client, but also making a genuine difference to those issues,” says Adam Emmerich of Wachtell, Lipton, Rosen & Katz.
  • “Many deals have a lot of moving pieces, whereby solving one problem could actually create another problem,” according to Lewkow. “What works well for IP purposes, for example, might not work well for tax purposes.”
  • Clients often expect transactions to be completed in a matter of days, which can mean working 18-hour days and weekends. This expectation can create an atmosphere of cooperation and expediency among parties. “You break down the walls between who’s doing what, and just dive in and do it,” Josh Bonnie of Simpson Thacher & Bartlett says.
  • It also means that flexibility is key. “Sometimes you may have a plan to go on holiday, then find out that you need to be on the spot and fully engaged,” says Emmerich. However, this comes with the territory of it being “a dynamic, interesting and exciting practice.”
  • “I don’t think there is one style which makes you an excellent or effective M&A lawyer,” explains Louis Goldberg of Davis Polk & Wardwell. He adds that at one end of the spectrum you have those who are “thoughtful, determined and tactical,” while at the other end there are the ‘deal junkies’: “They have the charisma and love the ins and outs of the deal climate.”
  • The broader category of corporate finance includes representing borrowers in lending transactions with banks, though most firms organize themselves so that the lawyers who advise the lenders and borrowers are part of the banking and finance team. 


The state of the market

Though the M&A market took a significant hit during the first half of 2020, it quickly rebounded in the following six months. A total of 43 'mega deals' (valued at $5 billion or more) hit the headlines in the second half of the year, compared to 21 in the comparable period in 2019. The largest of these was analytics giant S&P Global’s $44 billion merger with IHS Markit.

The technological sector had the highest concentration of deals, followed by pharmaceuticals and wealth management, reflecting the sectors that performed strongest through the height of the pandemic. Among the largest tech deals include Salesforce’s $26.7 billion purchase of videoconference platform Slack, made at the peak of remote working; and AMD’s $35 billion purchase of semiconductor maker Xilinx.

With a more stable government brought in by the Biden administration, strong performance for capital markets, and a rapid global vaccine rollout, many observers expect 2021 to be strong year for M&A activity. A report by PwC found that over half of US executives planned to increase M&A investment in 2021. True enough, the second month of 2021 was one of the strongest Februarys on record with over $400 billion worth of deals announced globally.

The lower valuation of vulnerable companies will likely see some opportunistic acquisitions favoring the cash-rich – acquisition finance will in turn be less accessible. We'd also highlight the importance of looking at M&A on a global scale: commentators predict the M&A volume gap between North America and EMEA will continue to narrow, and Asian markets continue to perform strongly.

Top career tips

George Bason Jr, partner, Davis Polk & Wardwell:

“The key to it is that law is a service profession. I think all personality types are welcome, but having that availability and enthusiasm 24 hours a day, 365 days a year is very important – once you accept that as a base line it’s a wonderful profession. And, with a few exceptions, clients treat their lawyers with respect and view them as a valued part of the team. It’s such a human thing, but a lot of people lose sight of the fact that it’s a service business.”

Alison Ressler, partner, Sullivan & Cromwell:

“There are three primary courses that students who are interested in corporate law should take. Securities regulation is key – you need to understand securities law and what’s involved in issuing securities. A general corporate law course explains the different forms of corporate entities and how federal and state regulations affect mergers. A business combinations or mergers class teaches the case law on mergers and the difference between hostile and friendly takeovers. Two key ancillary courses are corporate income tax and accounting for lawyers.”

“The best thing law students can do in preparation is read the Financial Times and The Wall Street Journal while in law school. Those papers will really give you a sense of what’s happening in the business world.”

Adam Emmerich, partner, Wachtell, Lipton, Rosen & Katz:

“Like most things in life, if it’s your passion and you find it engaging then it’s relatively easy to do well. If you’ve gotten the idea that it sounds good on paper, or is remunerative or prestigious, that won’t carry you through; you actually have to find it interesting.”

Victor Lewkow, partner, Cleary Gottlieb Steen & Hamilton:

“I think what surprised me the most is how much I actually enjoy being a corporate lawyer. I had no background or experience in business, but quickly discovered that mergers and acquisitions was an interesting and challenging practice that I found fun – and still do.”

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